Finance Videos

Mar 21, 2013 | 02:01

Deadline looms for troubled Cyprus

March 21 - Cypriot politicians are searching for a ''Plan B'' to find billions of euros to clinch a EU bailout and avert a financial meltdown. They now have five days before banks are due to reopen. Kirsty Basset reports.

TRANSCRIPT +

The clock is ticking and the race is on for a solution to Cyprus's troubled banking system.
Nervous customers queue at ATMs to withdraw money, uncertain what the coming days and weeks will bring.
(SOUNDBITE) KAROULA KAILI, UNIVERSITY STUDENT, SAYING:
"I don't know what to do now. I only have 20 euros, I have to put gas in my car, I have to go to Larnaca, I don't know what to do, now I am panicking."
The banks are shut - and will remain so until next Tuesday.
But Cypriot officials have until MONDAY to decide how to raise 5.8 billion euros to secure a rescue package worth 10 billion euros - and prevent financial meltdown.
The country's central bank governor, Panicos Dimitriades says the deadline will be met.
(SOUNDBITE)(English) CYPRIOT CENTRAL BANK GOVERNOR PANICOS DIMITRIADES SAYING:
"I expect a programme of support for Cyprus by Monday."
Cyprus' parliament REJECTED raising the cash through a tax on bank deposits, which politicans compared to a 'bank robbery.'
New options on the table include nationalising pension funds, issuing an emergency bond - or revising the bank deposit levy so only large investors are affected.
Russia has an interest in how things in Cyprus play out - with Russian citizens standing to lose billions in bank deposits if the banking sector collapse.
Cyprus's finance minister is in Moscow for a second day of talks aimed at raising the cash but so far no joy.
EU officials admit the stakes are high. Eurogroup chairman Jeroen Dijsselbloem.
(SOUNDBITE) (English) EUROGROUP CHAIRMAN JEROEN DIJSSELBLOEM SAYING:
"In the present situation I think there is definitely a systemic risk and I think that the unrest of the last couple of days have proven this, unfortunately."
In a confidential conference call, senior euro zone officials acknowledged they are 'in a mess' over Cyprus - and have openly discussed the possibility of the country leaving the euro zone.

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